06-05-09 Canada's second-largest natural gas producer plans to drill 50 % fewer gas wells this year than it did last year because of sagging prices.
Canadian Natural Resources drilled 70 natural gas wells in the first quarter, and will drill 70 more this year, Steve Laut, the company's president and chief operating officer, said.

Canadian Natural drilled about 280 natural gas wells in 2008. The company, which operates in Alberta's oil sands, West Africa and the North Sea, drilled about 900 wells in 2005, he said.
"It just doesn't make sense to drill gas," he said. "We will only drill for land expires, drainage issues, or strategic gas wells that will set us up for the future."

Canadian Natural, which trails EnCana in natural gas production, will crank up its drilling activity when gas prices stabilize about $ 6 per mm British thermal units -- a marker Mr Laut does not expect to hit until 2010 at the earliest. Long-term gas prices will likely settle between $ 6 and $ 8, he predicted in a conference call with analysts discussing Canadian Natural's first-quarter results.
"Gas just can't compete with oil projects," Mr Laut said. The stall in production will not equate to layoffs.

The gas drought will not damage Canadian Natural's fortune, he argued.
"We are a big gas producer, but we're an even bigger oil producer.... It will have very little probable impact on the company because we're able to allocate the capital to other projects that create a greater rate of return than gas."

Canadian Natural posted a profit of C$ 305-mm, or 56 cents a share, in the first quarter of 2009, down from C$ 727-mm ($ 1.35) in the same quarter last year. Operating earnings per share, which exclude foreign exchange losses and other items, totalled C$ 727-mm ($ 1.34) compared to C$ 872-mm ($ 1.61), the company said. The company's cash flow rang in at C$ 1.5-bn ($ 2.80) compared to C$ 1.7-bn ($ 3.19) in 2008.
"[Canadian Natural] blows away expectations," Andrew Potter, a research analyst at UBS Securities, said. He expected the company's operating earnings per share to reach $ 1.01, while the consensus estimate was 88 cents per share, he said.